Published 9:15 pm, Friday, January 18, 2013

Adjusted profit from continuing operations rose 13 percent to $4.67 billion, or 44 cents a share, Fairfield-based GE said Friday in a statement. That topped an average projection from analysts of 43 cents.

Emerging-market gains fueled the aviation and health-care businesses, which drove industrial performance and helped build a record $210 billion order backlog. That validated CEO Jeffrey Immelt's strategy of focusing on manufacturing, valued more highly by investors, while shrinking the finance unit after the global credit crisis.

"You see the slow but steady transition to industrial leadership to drive GE's growth," Nick Heymann, an analyst at William Blair in New York, said in an interview on Bloomberg TV with Tom Keene. "Order growth, while it slowed, didn't stall and you continue to see better pricing."

Earnings at GE Aviation, the world's largest maker of jet engines, climbed 22 percent to $1.04 billion, and industrial profit advanced 12 percent. At GE Capital, the finance unit that specializes in lending to small and medium-size companies, profit increased 9 percent to $1.81 billion in the quarter.

Shrinking finance

Immelt continued to make progress on his pledge to shrink Norwalk-based GE Capital's balance sheet and reduce its contribution to earnings. The unit's ending net investment, a measure of its assets, declined to $419 billion as of Dec. 31, an 18 percent decline since January 2009.

GE rose 74 cents to $22.04 in trading Friday. Its stock previously climbed 17.2 percent last year compared with a 13.4 percent gain for the Standard & Poor's 500 index.

Including pension expenses and other items, GE's fourth-quarter net income climbed 8 percent to $4.01 billion, or 38 cents a share, from $3.73 billion, or 35 cents, a year earlier.

Total sales climbed 4 percent to $39.3 billion in the quarter. Excluding the effects of foreign exchange and declining demand for wind turbines with an expiring U.S. tax credit, industrial orders rose 7 percent, the company said.

GE overcame a year-end slump that deepened as President Barack Obama and his opponents in Congress negotiated to avoid $600 billion of spending cuts and tax hikes. Organic sales growth of 4 percent slipped from an 8 percent gain in the third quarter.

Margins Expand

Profit margins at GE's industrial businesses, which also include oil and gas equipment, widened 1.2 percentage points in the fourth quarter from a year earlier, GE said in the statement. They expanded 0.3 percentage point overall in 2012, matching the company's forecast.

Full-year profit advanced 8 percent to $16.1 billion, or $1.52 per share, on $147.4 billion in sales, which were little changed.

"We ended the year with a strong quarter despite the mixed global economic environment," Immelt said in the statement. "The outlook for developed markets remains uncertain, but we are seeing growth in China and the resource-rich countries."